The Companies (Restriction of Number of Layers) Rules, 2017 imposes restrictions on number of layers for certain classes of holding companies. Which are the companies exempted from such restrictions ?

Rule 2(1) the Companies (Restriction on Number of Layers) Rules, 2017 provides that no company other than a company specified in Sub Rule 2, shall have more than two layers of subsidiaries. Provided that the provisions of this sub-rule shall not affect a company from acquiring a company incorporated outside India with subsidiaries beyond two layers as per the laws of such country: Provided further that for computing the number of layers under this rule, one layer which consists of one or more wholly owned subsidiary or subsidiaries shall not be taken into account. Rule 2(2) provides that the provisions of this rule shall not apply to the following classes of companies, namely: - A banking company as defined in clause (c) of section 5 of the Banking Regulation Act, 1949; A non-banking financial company as defined in clause (f) of Section 45-1 of the Reserve Bank of India Act, 1934 which is registered with the Reserve Bank of India and considered as systematically important non-banking financial company by the Reserve Bank of India; An insurance company being a company which carries on the business of insurance in accordance with provisions of the Insurance Act, 1938 and the Insurance Regulatory Development Authority Act, 1999; A Government company referred to in clause (45) of section 2 of the Companies Act, 2013.